Canadian economists don’t expect Fed to raise rates tomorrow 04/10/99

The Fed hasn’t hinted that it
will hike rates, Avery Shenfeld,
an economist with CIBC World
Markets, doesn’t expect one.
But, he wonders whether the Fed
will adopt a tightening bias
tomorrow, signaling a hike at the
November 16 meeting.

RBC Dominion Securities Inc.
is taking much the same view as
CIBC. It expects the Fed to sit
tomorrow, although it is expecting
one more rate hike in the not-too-
distant future. RBCDS says a rate
move at the November meeting may
not be realistic with Y2K-liquidity
issues looming. Regardless of the
Fed, Dominion Securities is
expecting the Bank of Canada to
keep Canadian rates at their
current levels.

For CIBC the Canadian focus is
on jobs. It is expecting a strong
September, after a big drop in
August. Both RBCDS and CIBC are
predicting 30,000 new jobs in
September, with the unemployment
rate stable at 7.8%.

That critical job data, for
both the U.S. and Canada, will be
out on Friday. Traders will be
focused on a U.S. employment report
at the end of the week for signs of
the Fed’s next move.